TMI Blog2015 (8) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... any such proprietary product. Unlike Infosys, the assessee does not have any substantial intangible assets . Thus we direct the exclusion of this company from the list of comparables. Wipro Ltd. (Seg.)is also a giant entity in comparison with the assessee company with marked differences as regards risk profile, nature of services, ownership of IP rights, expenditure on R & D etc, thus be excluded from the list of comparables. HCL Comnet Systems & Services Ltd. (Seg.) cannot be excluded from the list of comparable as in view of the fact that the assessee has admitted the functional comparability of the relevant segment of this company and the only difference pointed out is about its higher turnover and a potentially comparable case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion of these two companies from the list of comparables. - ITA No. 5271/Del/2012 - - - Dated:- 4-12-2014 - Sh. R. S. Syal, AM And Sh. A. T. Varkey, JM,JJ. For the Petitioner : Sh. Pankaj Gupta, CA For the Respondent : Sh. Peeyush Jain, CIT DR ORDER Per R. S. Syal, AM: This appeal by the assessee is directed against the order passed by the CIT(A) on 13.08.2012 in relation to the assessment year 2007-08. 2. Briefly stated the facts of the case are that the assessee is a wholly owned subsidiary of Calibrated Healthcare Systems LLC, USA and is engaged in providing I.T enabled services to its foreign entity. Its activities primarily comprise of processing of insurance claims, data entry and other support s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other facet of the computation of the ALP of this transaction. We will deal with these six companies, one by one, to determine their comparability. i) Infosys BPO Ltd. 4. The ld. AR contended that there is a vast difference not only in the size but also the functional profile, assets employed and risks undertaken by Infosys vis-a-vis the assessee. Per contra, the ld. DR supported the inclusion of this company in the list of comparables. 5. We find that whereas the assessee is a captive unit providing back office support services to its AE alone, which are basically in the nature of processing of insurance claims and the data entry, it can have no valid comparison with Infosys Ltd., as the latter is a full-fledged risk taking entrep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e strength from the judgment of Agnity India Technologies Pvt. Ltd. (supra), we hold this company to be incomparable with the assessee. The same is, ergo, directed to be not treated as comparable. iii) HCL Comnet Systems Services Ltd. (Seg.) 7. After considering the rival submissions and perusing the relevant material on record, we find that the TPO included the relevant segment of this company in the list of comparables. The ld. AR was fair enough to accept that there is no difference in the functional profile of this company with the assessee company. He, however, sought the exclusion of this company on the basis of high turnover. We do not approve the view canvassed by the ld. AR in this regard. When a company is functionally sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Financial year 2006-07 does not throw any light on the nature of business carried on by it. However, the Annual Report for the Financial year 2007-08, a copy of which is available on the paper book, divulges the nature of business carried on by it. It is seen that this company is a Knowledge Process Outsourcing (KPO) company providing data analytics and data processing solution to its clients. It is a recognized expert in Financial services and Retail and Manufacture. It provides consulting services and also process outsourcing. The above details have been pointed out by the ld. AR from the Annual accounts of this company for the Financial year 2007-08. Nothing has been brought on record by the ld. DR to show that the functions perfor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand, opposed this contention. 11. We find that there is a direct order by the Delhi Benches of the Tribunal in which these two companies have been excluded because of financial irregularities committed by their directors. In the absence of any contrary order brought on record by the ld. DR permitting the inclusion of companies under cloud, in the list of comparables, respectfully following the precedent we direct the exclusion of these two companies from the list of comparables. 12. The impugned order is therefore, set aside and the matter is sent back to AO/TPO for a fresh determination of ALP of the international transaction in conformity with our above directions. 13. In the result, the appeal is partly allowed for stati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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